Welfare Reauthorization: An Overview of the Issues

Publication Date: December 2005

Publisher: Library of Congress. Congressional Research Service

Author(s):

Research Area: Social conditions

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Abstract:

The conference agreement on the spending budget reconciliation bill (S. 1932) includes a scaled-back version of welfare reauthorization legislation. The agreement would extend the basic Temporary Assistance for Needy Families (TANF) block grant at current funding levels through FY2010; increase the share of TANF families required to participate in work activities; increase child care funding from current levels by $200 million per year ($1 billion over five years, FY2006-FY2010); provide federal cost-sharing for child support passed through to TANF and former TANF families; provide up to $100 million per year in demonstration grants for the promotion of “healthy marriages”; and establish $50 million per year for “responsible fatherhood” initiatives.

Excluded from the conference agreement on S. 1932 is a provision in the House-passed version of the budget reconciliation bill that would have reduced the federal matching rate for child support enforcement programs, though the agreement does prevent federal matching of child support incentive payments reinvested in the program.

If enacted, the agreement would end a four-year saga of legislative attempts to reauthorize TANF and related programs. Since October 1, 2002, the program has operated under a series of “temporary extension” measures.

In 2004, 12.5 million children lived in families with incomes below the poverty line (a 17.3% child poverty rate). Research has shown that poverty can have negative consequences on a child’s development. Children depend upon their parents for support, and most of the recent policy attention has focused on initiatives to move poor parents (mostly single mothers) from welfare to work and on reducing welfare dependency.

Following enactment of the 1996 welfare law, the cash welfare caseload fell from 4.8 million families in 1995 to 2.2 million in 2004, employment of single mothers has increased substantially, and child poverty rates have fallen. However, many families who leave the welfare rolls remain poor. Out-of-wedlock birth rates and children living in single-parent families remain at historical highs.

In February 2002, the Administration proposed its welfare reauthorization plan. The debate was dominated by controversy over the amount of child care funding and the Administration’s proposed changes to TANF work participation standards. The final agreement reflects the same child care funding increase that was provided in House-passed welfare reauthorization measures in 2002 and 2003 ($1 billion in additional mandatory child care funding over five years). The 2005 Senate Finance Committee welfare reauthorization bill (S. 667) would have provided $6 billion in additional child care funding over five years. Though the final agreement would require states to increase the share of their families participating in TANF work activities, it does not include the Administration’s proposal to set a 40-hour workweek standard or revise the activities that count toward the standard.

The reauthorization debate also reflected a renewed focus on noncustodial parents (usually fathers) and on family formation issues. The budget agreement includes responsible fatherhood initiatives and a scaled back version of the President’s initiative to promote healthy marriages.